METALS-Copper rises on Asia data, weak demand still a drag

By Susan Thomas LONDON, Nov 1 (Reuters) - Copper rose for a third day onThursday, helped by data that showed a glimmer of recovery inbig metals consumer China and other Asian economies, but gainswere tempered by concerns about demand and Europe's grindingdebt crisis. Data over the past month has shown the health of the globaleconomy remains fragile, with retail sales and the housingmarket pointing to an improvement in the United States butEurope is still struggling. In China, the world's largest consumer of copper, officialand private sector factory surveys showed the economy isregaining some traction, adding to other signs of economicrevival in October. The modest improvement nudged three-month copper on theLondon Metal Exchange up 0.9 percent to $7,829 per tonneby 1028 GMT, after rising 0.5 percent in the prior session. "We've had the slightly better PMI data which is no doubthelping metals lift off the lows we had earlier this week," saidCiti analyst David Wilson. "The lows we saw on Tuesday were good buying points and thedata is probably being a little more supportive, but obviouslythere is still a sense of caution." While the data out of Taiwan, South Korea, Singapore andAustralia are all positive for metals, the complex has beenwounded in recent weeks, RBC pointed out in a research note, andmany investors are still on the sidelines after the devastationcaused by Hurricane Sandy to swathes of the United States. "So "sell the rally" players are still likely to come in onany rally for the time being and the reduced liquidity willlikely mean choppy trading conditions will persist for a fewmore days," RBC said.

WORRIES Another worry is that Chinese copper buyers have not beenstocking up as most of them have not seen a sustainedimprovement in their order books. An executive with a top copper tube and pipe maker incentral China said his company still has not seen a pick-up insales despite October being the start of the peak season. "Orders have been slow since July. Our customers have beenunwilling to stock up until they've got clearer policy signalsafter the 18th Communist Party Congress," he said, referring toChina's once-in-a-decade leadership transition event scheduledto start on Nov. 8. A report by the International Wrought Copper Council (IWCC)saying the global market for refined copper is expected to swinginto a 281,000 tonne surplus in 2013 from a deficit this year,also dragged on prices. However, some of China's home appliance makers have reportedthird-quarter profits due to a reviving property market.

In other metals, three-month aluminium rose 0.9percent to $1,923.50 per tonne from $1,906 at the close onWednesday. "We continue to see risks in this market for as long as highcost production is subsidized, and excess supply is absorbedinto lucrative inventory financing deals and reiterate ourconcern that prices could test lower towards $1,870 in the nearterm," ANZ said in a research note. Some provincial governments in China are helping to cutpower costs for energy-ins tensive aluminium smelters. Tin was up 1.13 percent at $20,150 per tonne, from$19,925 at the close on Wednesday while zinc was up 1.1percent at $1,892 f r om $1,870. Lead was up 2.1 percentat $2,107 fr o m $2,068 and nickel was up 1 percent at$16,360 from $16,195.